Toys and Spinning Brushes: How John Osher Found His Way to Profits

John Osher holds out his battery-powered toothbrush. It’s encased in clear plastic as if it has just been pulled from the rack at a drug store. “See, you press it here, and it spins.” He demonstrates, and inside the package, the round head whirs like a tiny buzz saw. “We did that so people could try it in the store. It had to have a Try Me feature.” Osher and several partners developed the SpinBrush in 1999 and then, in 2001, sold it to Procter & Gamble for $475 million. It was the first low-cost, mass-marketed mechanical toothbrush.

Osher, 56, is a person to whom the overworked term “entrepreneur” actually applies. He has rarely worked for anyone else and never looked for a job. “I wouldn’t know how,” he says. “I don’t even have a business card.” Instead, he has made a career out of starting and selling companies—for increasingly large troves of cash. The SpinBrush is among the latest of his inexpensive but ingenious devices. As Osher likes to say, he specializes in devising products not for the rich but for people who shop at Wal-Mart “because there are a lot more of them.” Last month, he spent two days at Wharton as an entrepreneur-in-residence, counseling students on how to pursue their dreams of self employment and, if they’re lucky, riches.

Osher’s own career path zigged and zagged. He jokes that it began, at age 5, in pornography. His parents — Dad was a surgeon; mom, a writer — took a painting course at the local art museum in his hometown ofCincinnati, and the curriculum including painting nudes. At the semester’s end, they stashed their works in the attic. Osher charged his friends a nickel each to see them. Later, he sold defective squirt guns for a dime each.

Higher education came in fits and starts; Osher took seven years to complete college. He tried two other schools before graduating fromBostonUniversitywith a degree in psychology in 1971. Along the way, he managed to start two stores — one that peddled antique clothing and another that sold earrings. After graduation, he sold the shops and moved to a commune in Amity, N.Y. It was built around the teachings of George Ivanovich Gurdjieff, an early 20th century Armenian mystic. “It was kind of a semi-hippie community,” he says. “This was the early 1970s.” Gurdjieff’s philosophy melded Eastern religious practices such as meditation with hard physical labor. Members were expected to learn skills, and Osher chose carpentry and plumbing.

“I learned how basic mechanics worked,” he says. “It was fascinating for somebody who grew up not having a clue. At one point, I repaired tape recorders and record players.” He also learned not to be intimidated by engineers. “They don’t scare me when they say ‘no’ so quickly. If they say they can’t do something, I can say, ‘If the gear works this way, what if we did this?’ ”

Toy Story

By 1978, Osher was back inCincinnati. There, he started a company called ConServ to design and sell energy-saving devices such as insulating covers for hot-water heaters. But his itch to experiment remained. By then, he was a father, and he started tinkering with baby toys and furniture. Among his inventions was what he says was the first baby gym. It let infants play on the floor with toys suspended above them and resulted in one of the 40 patents that he owns. “It was called Rainbow Toy Bars. We used white plumbing pipe and put these rainbow decals on them.” Osher sold ConServ to Gerber in 1985 but agreed to stay on to design products. That lasted a year and a half. “I realized I was vice president in charge of nothing. I went on vacation for two weeks and came back, and my in box was empty.” So he quit.

The baby gym’s success made him think toys were a fertile field for a new venture. He raised money from family and friends to start CAP (originally Child at Play) Toys. “I figured I’d never run out of ideas.” Plus, he could test his notions on his kids and their friends. “There were times when I embarrassed my kids — I’d pull out a toy and show it to their friends at the ball field or something.” CAP nearly closed its first year when its first product — a blooming doll in a flowerpot — flopped. That underscored for Osher what he says is the key to entrepreneurship — finding a way to survive. “If I wrote a book, that’s what it would be called “Finding a Way”.

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“I had three students come to talk to me today. They’d gotten permission to start a coffee shop on campus and were having all sorts of problems and were pretty discouraged. I told them, ‘You have to find a way to make it happen. If you want to own your own business, that’s the most valuable lesson this school can teach you.’”

After CAP’s disastrous first year, Osher found a way by persuading his investors to pony up more money. Their risk paid off. By his second year, he had a hit toy. CAP’s Arcade Basketball hoop hung from the back of a door and kept score. CAP also developed the Stretch Armstrong doll and, more important, the Spin Pop, a lollipop with a battery-operated handle that twirled the candy in the eater’s mouth.

Spin Cycles

The Spin Pop and the Spin Brush might seem opposites; a magazine profile of Osher joked that his toothbrush solved the problem that his lollipop created. But the lollipop was the roadmap for the toothbrush. It, too, employed small gears and had to be handheld, inexpensive and battery-operated.

Osher sold CAP to Hasbro in 1997 for $120 million. Mainly, he says, the big toy company wanted the candy division, which by then had sales of $70 million a year. He took a year and a half off and then persuaded a group of designers he’d worked with on the Spin Pop to join him in a new venture. He wasn’t sure what exactly they would make, only that it had to appeal to the mass market.

Osher doesn’t invent all his products. Sometimes, he acquires an invention that is in its early stages and develops it. That is what he did with the Spin Pop, which was invented by four postal workers. But he is always searching for interesting ideas or unfilled niches. “I live in a posture of looking,” he says. “I compare it to somebody who writes jokes. They see jokes where other people don’t. They might look at that book over there and get inspired to write a joke.”

Osher rejects far more ideas than he embraces. “I’ve probably made just as much money discriminating against bad products as I have picking good ones. You see so many people who’ve done successful products who give so much of it back by doing bad ones.”

With the SpinBrush, Osher sensed an untapped market. Electric toothbrushes had been around for years but, at about $80 each, they were too expensive for many buyers. Plus, Osher and his partners knew that they could employ the same sort of technology they had used on the Spin Pop.

“Our advantage was that we were trying to design up from 80 cents, while everybody else was trying to design down from $79.” To succeed, the product could cost only a few dollars more than a conventional toothbrush and had to have a long-lasting battery. And its packaging had to have the Try Me feature. That amounted to free advertising and could win over skeptics.

In 1999, Osher and his partners formed a company called Dr. Johns Products and, later that year, rolled out the brushes in a chain of Midwestern stores called Meijers. They quickly caught on. Procter & Gamble, based in Osher’s hometown, soon came calling. The deal Osher and his associates struck allowed them to join the company for a year to ensure that their invention was properly launched.

“P&G is a master of managing mature products, and their systems work for that,” Osher explains. “They don’t work for an entrepreneurial venture.” Initially, for example, P&G managers wanted to halt production for four months to allow time to build inventory. “Their rules required them to have something like 90 days worth of inventory in their warehouses at all times and to be able to supply the whole country 99% on time. But we had tremendous momentum. Consumers were clamoring for the product. If our group hadn’t been there, the supply division would’ve just said, ‘No, you can’t ship it.’”

With Osher and his partners leading the effort, SpinBrush sales grew from $44 million to $160 million a year. Today, they are about $300 million.

After helping P&G with the introduction, Osher and his team went back to developing their own products. Their next one was the Dish Doctor, a battery powered dish scrubber. They sold it to P&G, too, and the product made its debut last month. “It won’t be as big as the SpinBrush,” Osher says. “You can only sell one to every household, while with the toothbrush you could sell it to every person.”

Now, as restless as ever, Osher is already on to his next idea, though for now he’s not saying what it is. “I think it will be every bit as big as the SpinBrush. It’ll be a revolutionary product. It’ll change the marketplace.”

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